Question 1

Which one of the following statements regarding bundle pricing is most accurate?

Accepted Answer

A)   Bundle pricing is intended to benefit the consumer, not the seller.
B)   Bundle pricing is really "bundle packaging" since the price charged is for two or more of the same products that are shrink-wrapped together.
C)   Bundle pricing is often associated with a skimming strategy.
D)   Bundle pricing often provides a lower total cost to buyers and lower marketing costs to sellers.
E)   Bundle pricing is based on the idea that consumers value the individual items more than they value the group contained in the package.F) B) and D)
G) C) and E)

Question 2

Three different objectives relate to a firm's profit. One objective, known as ________, is common in many firms because the targets can be set and performance measured quickly.

Accepted Answer

A)   managing for long-run profits
B)   target return
C)   break-even strategy
D)   maximizing current profit
E)   minimizing riskF) B) and C)
G) All of the above

Question 3

The key to setting a final price for a product is finding an approximate price level to use as a reasonable starting point. Which of the following is one of four common approaches to selecting an approximate price level?

Accepted Answer

A)   demand-oriented
B)   cause-oriented
C)   revenue-oriented
D)   stakeholder-oriented
E)   distribution-orientedF) A) and B)
G) A) and D)

Question 4

Market share is the ratio of the ________ to those of the industry, including the firm itself.

Accepted Answer

A)   target return on sales
B)   marginal profit of the firm
C)   firm's sales revenues or unit sales
D)   marketing expenses of the firm
E)   profits of the firmF) All of the above
G) B) and D)

Question 5

In response to Duracell's introduction of the Duracell Ultra battery, Energizer introduced an Advanced Formula battery. But unlike Duracell, Energizer priced its batteries at a low initial price, believing that consumers were too price-sensitive to pay more in this category. In this case, Energizer used

Accepted Answer

A)   penetration pricing.
B)   prestige pricing.
C)   skimming pricing.
D)   price lining.
E)   cost-plus-fixed-fee pricing.F) D) and E)
G) B) and E)

Question 6

Price fixing is

Accepted Answer

A)   an arrangement a manufacturer makes with a reseller to handle only its products and not those of a competitor.
B)   the practice of charging a very low price for a product with the intent of driving competitors out of business.
C)   the practice of charging different prices to different buyers for goods of like grade and quality.
D)   a conspiracy among firms to set prices for a product.
E)   a seller's requirement that the purchaser of one product also buy another product in the line.F) A) and E)
G) A) and D)

Question 7

What is bait and switch? Give an example of it.

Accepted Answer

Bait and switch is a common deceptive pr...

Question 8

A dynamic pricing policy allows marketers to respond to

Accepted Answer

A)   requests for allowances.
B)   threats of discrimination.
C)   success measures for the firm's previous promotions.
D)   changes in demand, cost, and competitive factors.
E)   inquiries by government agencies.F) All of the above
G) A) and C)

Question 9

Each month, the owner of a car wash pays $2,500 in rent, $500 in utilities, $750 interest on the business loan, an insurance premium of $200, and $250 on advertising on local bus routes. A full-service car wash is priced at $10.50. Unit variable costs for the car wash are $7.50. At what level of revenue will the car wash break even?

Accepted Answer

A)   $4,200
B)   $10,500
C)   $14,700
D)   $30,000
E)   $39,900F) B) and D)
G) D) and E)

Question 10

Four cost concepts are important in pricing decisions: total cost, variable cost, unit variable cost, and

Accepted Answer

A)   dividend cost.
B)   liquidity cost.
C)   discretionary cost.
D)   fixed cost.
E)   elastic cost.F) B) and C)
G) A) and B)

Question 11

When Kroger, a national supermarket chain, uses a special promotion to price a six-pack of soda at $2.09 (which is below its customary price level of $4.29) , it is attempting to

Accepted Answer

A)   drive its competition out of business.
B)   attract customers in hopes they will buy other products as well.
C)   fill its parking lot so its store will look successful.
D)   work with the local bottler to move products that are close to their expiration dates.
E)   help stimulate the local economy and generate good will with its customers.F) C) and D)
G) C) and E)

Question 12

Demand-oriented approaches weigh factors that underlie expected ________ more heavily than such factors as cost, profit, and competition when selecting a price level.

Accepted Answer

A)   total revenue
B)   stakeholder concerns
C)   discounting practices
D)   product substitutes
E)   customer tastesF) B) and C)
G) B) and E)

Question 13

The two forms of cost-plus pricing are

Accepted Answer

A)   cost-plus-fixed-fee pricing and cost-plus-variable-fee pricing.
B)   cost-plus-ROI pricing and cost-minus-ROI pricing.
C)   target return on sales pricing and target return on investment pricing.
D)   cost-plus-percentage-of-cost pricing and cost-plus-fixed-fee pricing.
E)   dynamic pricing and flexible pricing.F) B) and D)
G) C) and D)

Question 14

Companies use a price premium to assess whether their products and brands are priced above, at, or below the market. This price premium equals

Accepted Answer

A)   unit volume market share for a brand, divided by dollar sales market share for a brand, minus one.
B)   dollar sales market share for a brand, divided by unit volume market share for a brand, plus one.
C)   dollar sales market share for a brand, divided by unit volume market share for a brand, minus one.
D)   unit volume market share for a brand, divided by dollar sales market share for a brand, plus one
E)   dollar sales market share for a brand, divided by unit volume market share for a brand, minus the number of competitors against which a brand is being measured.F) A) and E)
G) None of the above

Question 15

SHAPE magazine is targeted at young women seeking healthier lifestyles. At a price of $3.00 per copy, 1.25 million copies are sold. If the price per issue is increased to $3.25, only 1 million copies would be sold. Fixed costs are $1 million and unit variable costs are $0.50 per magazine. From the information provided here, what is SHAPE magazine's total revenue obtained at the lower $3.00 price?

Accepted Answer

A)   $3,750,000
B)   $3,250,000
C)   $2,125,000
D)   $1,750,000
E)   $3,000,000F) C) and D)
G) None of the above

Question 16

A maximizing current profit pricing objective implies that a company chooses to

Accepted Answer

A)   set targets for which performance can be measured quickly.
B)   give up immediate profit in exchange for achieving a higher market share in hopes of penetrating competitive markets.
C)   set a profit goal that is often determined by its board of directors.
D)   reduce investment in any further market or product research.
E)   set prices based on return on sales.F) A) and B)
G) A) and C)

Question 17

Carmex uses all of the following approaches to setting the price of its products except which?

Accepted Answer

A)   profit-oriented
B)   competition-oriented
C)   cost-oriented
D)   elasticity-oriented
E)   demand-orientedF) B) and D)
G) None of the above

Question 18

Customary pricing refers to

Accepted Answer

A)   a pricing method where the price the seller quotes includes all transportation costs.
B)   setting the same price for similar customers who buy the same product and quantities under the same conditions.
C)   deliberately selling a product below its list price to attract attention to it.
D)   using a price that is dictated by tradition, a standardized channel of distribution, or other competitive factors.
E)   pricing based on what the market will bear.F) A) and E)
G) None of the above

Question 19

You can buy a General Electric dishwasher for $399 or you can buy a similar Bosch brand dishwasher for $989. Since Bosch uses its pricing strategy to project a high-quality product image, it is most likely using ________ pricing.

Accepted Answer

A)   yield management
B)   standard markup
C)   prestige
D)   penetration
E)   cost-plus-fixed-feeF) B) and D)
G) B) and E)

Question 20

Which of the following companies would be most likely to use target return-on-investment pricing?

Accepted Answer

A)   a farmer
B)   a supermarket chain
C)   an engineering firm
D)   a veterinarian
E)   an automobile manufacturerF) A) and D)
G) A) and C)

Exam 11: Pricing Products and Services

Demand-oriented approaches weigh factors that underlie expected ________ more heavily than such factors as cost, profit, and competition when selecting a price level.

Correct Answer
verified

Four cost concepts are important in pricing decisions: total cost, variable cost, unit variable cost, and

Correct Answer
verified

Correct Answer
verified

You can buy a General Electric dishwasher for $399 or you can buy a similar Bosch brand dishwasher for $989. Since Bosch uses its pricing strategy to project a high-quality product image, it is most likely using ________ pricing.

Correct Answer
verified

The key to setting a final price for a product is finding an approximate price level to use as a reasonable starting point. Which of the following is one of four common approaches to selecting an approximate price level?

Correct Answer
verified

Customary pricing refers to

Correct Answer
verified

Companies use a price premium to assess whether their products and brands are priced above, at, or below the market. This price premium equals

Correct Answer
verified

The two forms of cost-plus pricing are

Correct Answer
verified

What is bait and switch? Give an example of it.

Correct Answer
verified
Bait and switch is a common deceptive pr...
View Answer

Correct Answer
verified

When Kroger, a national supermarket chain, uses a special promotion to price a six-pack of soda at $2.09 (which is below its customary price level of $4.29) , it is attempting to

Correct Answer
verified

A dynamic pricing policy allows marketers to respond to

Correct Answer
verified

Three different objectives relate to a firm's profit. One objective, known as ________, is common in many firms because the targets can be set and performance measured quickly.

Correct Answer
verified

Which one of the following statements regarding bundle pricing is most accurate?

Correct Answer
verified

Price fixing is

Correct Answer
verified

A maximizing current profit pricing objective implies that a company chooses to

Correct Answer
verified

Which of the following companies would be most likely to use target return-on-investment pricing?

Correct Answer
verified

Market share is the ratio of the ________ to those of the industry, including the firm itself.

Correct Answer
verified

Carmex uses all of the following approaches to setting the price of its products except which?

Correct Answer
verified

Correct Answer
verified

Exam 11: Pricing Products and Services

Demand-oriented approaches weigh factors that underlie expected ________ more heavily than such factors as cost, profit, and competition when selecting a price level.

Correct AnswerverifiedShow Answer

Four cost concepts are important in pricing decisions: total cost, variable cost, unit variable cost, and

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

You can buy a General Electric dishwasher for $399 or you can buy a similar Bosch brand dishwasher for $989. Since Bosch uses its pricing strategy to project a high-quality product image, it is most likely using ________ pricing.

Correct AnswerverifiedShow Answer

The key to setting a final price for a product is finding an approximate price level to use as a reasonable starting point. Which of the following is one of four common approaches to selecting an approximate price level?

Correct AnswerverifiedShow Answer

Customary pricing refers to

Correct AnswerverifiedShow Answer

Companies use a price premium to assess whether their products and brands are priced above, at, or below the market. This price premium equals

Correct AnswerverifiedShow Answer

The two forms of cost-plus pricing are

Correct AnswerverifiedShow Answer

What is bait and switch? Give an example of it.

Correct AnswerverifiedBait and switch is a common deceptive pr...View AnswerShow Answer

Correct AnswerverifiedShow Answer

When Kroger, a national supermarket chain, uses a special promotion to price a six-pack of soda at $2.09 (which is below its customary price level of $4.29) , it is attempting to

Correct AnswerverifiedShow Answer

A dynamic pricing policy allows marketers to respond to

Correct AnswerverifiedShow Answer

Three different objectives relate to a firm's profit. One objective, known as ________, is common in many firms because the targets can be set and performance measured quickly.

Correct AnswerverifiedShow Answer

Which one of the following statements regarding bundle pricing is most accurate?

Correct AnswerverifiedShow Answer

Price fixing is

Correct AnswerverifiedShow Answer

A maximizing current profit pricing objective implies that a company chooses to

Correct AnswerverifiedShow Answer

Which of the following companies would be most likely to use target return-on-investment pricing?

Correct AnswerverifiedShow Answer

Market share is the ratio of the ________ to those of the industry, including the firm itself.

Correct AnswerverifiedShow Answer

Carmex uses all of the following approaches to setting the price of its products except which?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Bait and switch is a common deceptive pr...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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